Wow Air, the Icelandic budget airline known for remarkably cheap trans-Atlantic flights, suddenly announced early Thursday morning that it was canceling all of its planned flights, leaving passengers on both sides of the Atlantic stranded after it failed to find funding to keep the company running, according to an announcement from the airline.
“This is probably the hardest thing I have ever done, but the reality is that we have run out of time and have unfortunately not been able to secure the funding of the company,” Wow CEO and founder Skuli Mogensen wrote in a letter to the company’s 1,000 employees, according to Reuters. “I will never be able to forgive myself for not taking action sooner.”
The airline advised stranded passengers to look to other airlines for “rescue fares,” but it did not offer to help those passengers find those flights. The Icelandic Transport Authority told Reuters that Icelandair, EasyJet, and Norwegian have all offered rescue fares to help those passengers.
The airline also did not promise to reimburse customers for their already purchased flights. Those who bought their tickets from European travel agents as part of a package tour would be protected, and those who bought travel protection may be entitled to claim compensation. “However, such compensation is often limited,” according to the statement. It may also compensate ticket buyers “in accordance with European regulation on Air Passenger Rights,” and passengers will be able to make claims if the airline declares bankruptcy.
Hours before the announcement that it was shutting down its operations, Wow had postponed Thursday flights while seeking what it described as the final stages of fundraising from a group of investors. Over the past few months, the airline had struggled to stay afloat, and at one point it had neared a deal to be bought by its rival, Icelandair, only to have that deal fall apart last Sunday, according to the Financial Times.
According to Reuters, 3.5 million passengers flew with Wow last year, and the airline shuttled more than 30 percent of tourists to Iceland. Research from Icelandic bank Arion showed that the airline’s collapse could mean 16 percent fewer tourists next year.